US Senate Approves Middle Class Tax Cuts

The Democratic-controlled U.S. Senate has approved legislation to extend tax cuts for middle-income Americans, while allowing them to expire for the wealthy.

The bill, approved Wednesday by a vote of 51-48, would maintain tax cuts passed during the tenure of former president George W. Bush on Americans making under $250,000. The measure is sure to be voted down in the Republican-controlled House of Representatives. Earlier Wednesday, the Senate rejected the Republican-backed bill that would have extended all of the Bush-era tax cuts was rejected.

Wednesday's vote gives Democrats and President Barack Obama an election-year campaign issue to highlight their differences with House Republicans, who have vowed not to bring the bill up for a vote. Mr. Obama issued a statement saying House Republicans are "holding hostage the middle-class tax cuts for 98 percent of Americans."

Lawmakers are facing the prospect of a so-called "fiscal cliff" next January, when all the Bush-era tax cuts expire and automatic spending cuts for the military and domestic programs take effect, which economists say could push the struggling U.S. economy back into recession.